Self (formerly Self Lender) Review

Choosing a credit builder is a daunting process. Thankfully, we’ve done extensive research and written a comprehensive Self (Formerly Self Lender) review for you.

A common problem associated with many consumers is how they will build credit if they don’t have credit to begin with.

Your credit score is incredibly important. It can be the factor determining whether you’ll buy a car, a home, or get a lucrative job.

For a long period of time, secured credit cards availed spectacular methods to build credit from the ground up or restore incredibly vitiated credit scores.

However, these cards have up-front cash requirements that go as high as $500. Without a doubt, raising this amount when you’re trying to build credit can be an uphill task.

A couple of years ago, Self Lender CEO James Garvey revealed that credit unions required you to deposit money into a savings account, which you use as collateral.

While trying to find a way to build his credit, Garvey bumped onto credit builder loans from credit unions, but he realized that they need a colossal up-front cash deposit.

Despite how these unions seemed great in their offer, one significant drawback is how they demanded money in sums, which Americans didn’t have. At the same time, consumers needed to visit their physical offices, typical for being located in odd locations and inconvenient working hours.

After thinking over the issue for some time, Garvey thought that partnering with a bank and creating a product where the bank lends consumer money upfront, then save the money in a savings account for a year would be great.

That’s the conception of Self Lender, and now it’s become a booming trend.

How Self Lender works

This financial institution offers “Credit Builder” accounts.

You borrow an FDIC-insured deposit CD account and make monthly payments for 1 or 2 years.

Once the bank opens the CD, the FDIC-insured certificate is “locked,” and it won’t be available for withdrawal until you pay the loan in full. The account will be held by Atlantic Capital Bank, Sunrise Bank, or Lead Bank.

Each monthly payment you make will build towards the CD balance, and at the end of the loan term, the CD will be available for withdrawal.

One notable element of these accounts is that you select your loan term and repayment period, and they report account activity to the three major bureaus.

Self gives you an option to choose $525, $545, $1000, and $1,700, and you can choose to pay an amount ranging from $25 to $250 per month after a one-time activation fee of $9-$15.

Depending on your loan amount, you’ll pay interest at rates between 10.34% and 13.16%.

If you, for instance, choose $525 CD to be paid over 24 months, you’ll end up paying $609. A quick calculation reveals you’ll pay $84 in interests, which translates to an overall APR of 14.92%.

At a glance, this interest rate is lower than that charged by most credit cards, and the fact that Self reports to the three bureaus will work to your leverage.

Self Lender stats

After you’ve opened your account, you’ll gain access to your tailored account management dashboard to watch your credit score, check your account balance, and reconcile your account documents.

Monthly payments are automated, but you can clear your CD balance off early through an option on your dashboard.

This process works automatically when you connect your bank account to self account, and you can possibly opt to make single payments or initiate an automated debit.

Once you create an account, you’ll be required to add a beneficiary in the records to whom the funds will be disbursed after the payment period.

The site also offers an informative blog with information regarding credit and personal finance topics to help you get versed with all information you need.

At the end of the repayment period, Self Lender will automatically disburse the accumulated funds into your bank account in the records,

It calls for 10-14 business days for the money to enter into your bank account.

Self Lender app

Self has an application that helps you track your account status and check your credit builder loan account.

With multiple layers of encryption, Self works to prevent fraud through the step-wise layers of security.


Fast approval

The application process is incredibly straightforward.

You are required to be 18 years of age and above, have a legitimate checking account, and an authentic SSN.

Rather than assessing your creditworthiness using your credit history, Self Lender uses ChexSystems – a firm that evaluates your banking history, bounced checks, and closed accounts.

ChexSystems will generate a negative report only if you have closed bank accounts due to returned checks or overdrafts.

Credit building

Working on your credit is probably something preliminary in your mind when starting from scratch.

When it comes to account activity reporting, building your credit from scratch is entirely different from rebuilding your credit.  

Self Lender reports account activity to the three data centers, after which it’s up to you to make timely payments for positive account activity.

If you have a low score because you’re utilizing too much of your credit, having a Self Lender CD account can boost your score significantly.

On the contrary, making late payments will severely hurt your credit score.

Credit score and monitoring

Once you open a Self Lender account, you’ll have access to a dashboard to log in and check your credit score.

You’ll also monitor your credit to help you trail your advancements and take note of any developments.

Cons – Self Lender Review

Not available for withdrawal until you clear the loan

If you take a loan that lasts 24 months, you won’t access the money until you clear the balance in full.

This means that you possibly have to search for another loan issuer if an emergency comes up.

Unless you wait for the repayment period to elapse, you can’t use the money to do anything.

However, if you feel that you can’t wait for that time to elapse, you might withdraw the money, but after a severe penalty.

This additional cost will only add to your debt and strain you from making uninterrupted progress.

You cannot temporarily suspend your account

If you want to suspend all account activities such as monthly payments, due to some financial emergency, you might not have that provision.

The company will continue reporting account activity to the three credit bureaus, which means all defaulted payments will show up in your credit report.

These defaulted payments will, in turn, damage your credit report and eat out several points from your score.

Self vs. Other Credit Building Tools

Having bad credit could restrict your options to specific resources used to build credit.

A secured credit card works closely similar to how Self works since it reports to the three credit bureaus.

The drawback with a secured credit card is the requirement to secure some amount as collateral. If you don’t have the money, you won’t get the card, and neither will you access your funds until you clear your credit line or the bank releases the lien placed in your account.

One perk of a secured card over a CD account is that you can use it as a credit card. You’ll, however, have to pay interest on the card that can accumulate your costs further.

At the same time, an alternative way to build credit is by asking someone to accept joint responsibility for your debt, as long as they have good credit. This strategy will give you a lower interest rate and more friendly terms.

If you don’t find one with a good credit score, this strategy will certainly not work. Besides, if you make late payments, your cosigner’s credit score will drop, and they will be responsible for paying the balance.

Moreover, you can acquire a prepaid card to build your credit. Although they work like credit cards, they don’t necessarily help you build credit, and you can’t spend more than you have on the card.

Self pricing

  • Zero application fee
  • Activation: $9 – $15
  • APR between 12% and 15%
  • Delinquencies: a late fee of 5% of the scheduled monthly payment after a 15-day grace period.

Should I sign up for Self?

Self is an incredible credit builder plan if you don’t have the money to secure a prepaid credit card or unable to find someone willing to cosign your loan.

Although you’ll incur the activation fee and the interests, you’ll have full ownership once you complete payment towards the account.

At the same time, the account holders report your payment reports to the three information centers.

Pragmatically, Self helps you increase your savings and build your credit score. Since those financial institutions are interconnected, Self will give you a platform to take control of both – simultaneously.

One major downside of this company is that once you start the program, you won’t have the option to cancel – unless you can fully complete paying the balance.

That said, it’s wise to go for the one-year plan, although the APR and activation fees can be a little high since you’ll clear the balance quickly.

Requirements for opening a self account

To open the account, you’ll need to attain the following requirements:

  •  Valid contact information
  • Either a bank account, prepaid card, or debit card
  • Be a permanent US citizen with a valid physical address

The company recommends using a linked bank account to complete monthly payments since a debit card comes with an additional fee of $0.30 plus 2.99% of the amount due.

The process begins by heading to their homepage and afterward click on the “Get Started” option.

You’ll get directed to a page where you fill out your financial information for automated withdrawals, SSN, address, and phone number.

Afterward, you’ll be asked to select the terms of your loan – which you should commit to paying an amount between $25 and $150 per month.

Since Self Lender doesn’t check your credit reports, it runs your records through the ChexSystems database to see if you have negative account activity previously.

The application procedure is speedy, and you’ll be in receipt of a response almost immediately after application.

Borrowing limits and fees

You can borrow from as low as $525 up to $1700.

If you choose to borrow $525, which you should repay in 24 months, the monthly payment would be $25. At the same time, borrowing $545 for 12 months will make your monthly fee $48.

While Self Lender is incredibly transparent about its terms and fees, you should never sign the papers without reading through the fine print.

These terms are fair for lines of credit since they do not have exorbitant interest, fees, and late payments.

Just keep in mind, however, that the terms will differ in accordance with the loan amount that you choose.

At a glance, the APR reduces as the amount borrowed increases, but here’s a breakdown of common fees associated with Self.

  • Administrative fee

This is a single remittance that you make when you open the account.  Depending on the amount you borrow, this fee varies from $9 to $15.

  • APR

Admittedly, most consumers hardly comprehend the dissimilarity between interest and APR. The interest rate is the money that you’re imposed on in interest. On the other hand, the APR is the interest plus other annual fees calculated as a proportion of the borrowed amount.

Several loan issuers only charge APR on late payments, but Self calculates everything right from the beginning.

  • Finance charge

This amount refers to the sum of interest and associated fees.

  • Late fees

You’ll be given a grace period of 15 days for making late payments. If you exceed this period, however, you’ll incur a 5% interest on the amount due.

Other viable ways to build credit

Your credit score is one of the essential components of your financial life.

It tells loan issuers how prudently you utilize credit and how much of a liability you can be.

The better the credit score, the more credible you’ll be in the eyes of potential lenders, and the lower the interests you’ll accrue.

Improving your credit score takes some effort and time. Here’s a guide on what you require to do to realize the results.

Check your credit reports

It’s helpful to understand what’s working to your favor and the things working against you.

Retrieve your credit report from the three data information centers – Equifax, TransUnion, and Experian – then examine each to evaluate elements potentially tanking your score.

Entries that can contribute to a good score include timely payments, keeping your utilization below 33%, credit mix, and limited inquiries for new credit.

Besides, you should check your credit report for errors such as typos, mistakes in address, and wrong addresses.

On-time payments

A massive chunk of lenders uses the FICO credit scoring model. It’s composed of five different elements used to calculate your score.

Among other entries, payment history accounts for 35% of your report and has the most crucial impact on your score.

This is the top reason it’s good to pay off old debts like student loans, auto loans, and mortgages.

Other tips to evade late payments are coming up with an automated filing system used to trail your monthly payments and setting time limit alerts so you are aware when a bill is due.

Another option is charging a majority of your monthly bill payments to your card to simplify your payments and have a history of timely payments.

Keep utilization below 30%

After your payment history, credit utilization ranks second in accounting for your credit score each month.

The general rule is that you keep your total balance at most 33% of your cumulative credit limit.

Besides, you can ask your loan issuer to increase your credit limit. Some issuers have an online increment option where you only have to update your household income.

Reduce your applications for new credit

A soft inquiry happens when you credit or give a potential employer authorization to look into your credit or a firm with whom you already do business.

While soft inquiries won’t impact your credit, a hard inquiry can tank your credit score for months or years. When you apply for any loan, the issuer performs a credit check on your account, which translates to a hard inquiry.

Financial institutions may assume that you’re in urgent need of money because you’re facing financial difficulties, and they may brand you as a potential risk.

If your credit score is low, it’s wise to avoid applying for new credit until you have everything set.

Conclusion – Self Lender Review

The bottom line is to improve your credit and take hold of your financial life.

It can take a period of approximately several weeks to months before you start seeing an upward trend.

In some cases, you may opt to hire a credit repair professional to handle the paperwork as you deal with the things you can control.

The earlier you start focusing on your credit, the better as you’ll start seeing progress shortly.

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Robert Ferry

We are an unbiased knowledge center for finance and our goal is to help you make your own, educated decisions about getting your credit life turned around.